Due Diligence: international reputability
Due Diligence, or how do you check a partner's reputation and potential before making a commitment?
You want to develop your business internationally and have identified a potential local partner. Before entering into further negotiations and making a commitment, you wish to validate the reputation and good repute of this company. To do this, you need a specialist in the due diligence process who can assess the opportunities, reliability and risks presented by the target company.
What is due diligence?
Due Diligence is a process of in-depth investigation and assessment carried out by a company or individual before entering into a commercial transaction, partnership or investment. This process provides an in-depth understanding of the situation, the viability of its players and the potential risks associated with the sector and the company or project.
What risks does due diligence protect you against?
It allows you to limit any commitment that could lead to financial, legal, operational or reputational losses. By identifying potential risks at an early stage, you increase your potential for making the right decisions, and you have a wealth of arguments at your disposal to help you conduct your negotiations more effectively and define the terms of your contracts more clearly.
Due Diligence - 6 key steps
01
Identification and validation
Before committing yourself to a potential business partner, it’s essential to get to know the company and the people who run it. Make sure that the company is clearly identified as a legal entity, by checking its shareholders, beneficiaries, structure and board of directors. You should also look for evidence of the identity of directors and examine the sources of their assets and funds, as well as any potential links with political figures.
02
Preliminary research and primary analysis
To get an overview of the company or the project you are considering, carry out a thorough preliminary analysis of the company’s general environment. This includes understanding the regulatory framework in which it operates and identifying its key stakeholders. This information will help you to assess the context in which the company operates and to identify any potential issues.
03
Specialist documents
Gather the essential information required for an in-depth study. This may include specialist documents such as information on the company’s environmental impact, particularly if it is an industrial company or site. By carefully examining these documents, you will gain a better understanding of the challenges and opportunities associated with the company’s activity in its specific environment.
04
Analysis of risks and opportunities
Carry out an in-depth analysis of the risks and opportunities associated with the company or project. In addition to information collected locally, you should check watch lists for possible global sanctions, known criminal entities, disqualified companies or individuals, and political links. Also assess the risks associated with the territory, business sector and target, such as financial health, operational continuity, corporate culture, procedures and policies, communication and reputation, as well as counterparties and commitments. Finally, carry out on-site investigations to identify operational, counterparty, reputational and market risks. Identify potential opportunities, both internal and external, so that you can make informed decisions.
05
Detailed, qualified alerts
The alerts identified during the analysis must be carefully detailed and qualified. Determine whether these alerts call into question the planned transaction or require further action on the part of all parties before committing further. Keep up to date with these alerts so that you can make informed decisions.
06
Appropriate recommendations
The recommendations made must be feasible, legal and proportionate to the project and the risks identified. Use these recommendations to decide on the next steps in your growth project. A cautious, informed approach will enable you to make informed, secure decisions.
Discover Salveo, your partner in the due diligence process
Salveo is the partner of choice for companies and local authorities looking to expand internationally.
Founded in 1992, Salveo joined the ADIT Group, Europe’s leading strategic intelligence company, in 2013, strengthening its range of solutions and its global network of experts and local correspondents.
Today, Salveo offers the widest and most reliable range of solutions to support international development:
- International strategic consulting
- Local operational services
- Supporting regional development
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